Making your money make a difference.
When it comes to giving to charity, Americans have more than 1 million choices.
To be exact, there were 1,521,052 charitable organizations in the U.S. when the National Philanthropic Trust published its most recent count.
During this season of giving, you may be hearing from many of them. How can you choose a charity from among the many doing worthy work ― while also making sure your contribution makes a difference that matters to you?
Here are questions to ask before you decide to donate, based on advice from regulators and charity watchdog organizations.
What’s most important to you?
Are you passionate about literacy? Animal welfare? Cancer prevention? After deciding what’s most important to you, consider more specifically what you want your dollars to do: Help breast cancer researchers, for example, or provide free mammograms? Find an organization whose mission aligns with your values ― including whether it’s making a difference locally, if that’s important to you.
If you’re thinking about giving to a local organization, consider visiting its program site to see its work in action. And if any charity is unwilling to answer your questions about its goals and accomplishments, choose another.
Did someone ask you for money over the phone?
If a telemarketer piques your interest in a charity, take time to research the organization before you give directly to it ― reducing the risk of being scammed while also ensuring your entire gift goes to the charity rather than a fund-raising company.
Is someone pressuring you to give right away, or donate in cash or by wire transfer?
If so, end the conversation. You need time to consider whether this gift is right for you ― and to investigate the organization doing the asking. Also, reputable charities don’t use pressure tactics to solicit gifts. And cash and wire-transfer requests are signs of a “charity” scam.
What’s that name again?
Don’t be tricked by familiar-sounding names. Disabled American Veterans is a legitimate organization. The United States Disabled Veterans, on the other hand, landed on watchdog group Charity Navigator’s “high concern” list after its “founder” tried to keep donationsThis link opens a third-party website that is not affiliated with STCU..
Is the charity legitimate?
Check GuideStarThis link opens a third-party website that is not affiliated with STCU. or Charity NavigatorThis link opens a third-party website that is not affiliated with STCU. to tell whether the charity you’re considering is a tax-exempt organization or falls short of IRS criteria. Alternatively, GuideStar recommends asking to see a faith-based charity’s official listing in a denominational directory or its “letter of determination” confirming its tax-exempt status.
Has the charity run afoul of local regulators?
In Washington, check with the Secretary of State’s “GiveSmart!” programThis link opens a third-party website that is not affiliated with STCU.. In Idaho, contact the Attorney General Office’s Consumer Protection DivisionThis link opens a third-party website that is not affiliated with STCU.. (In other states, start hereThis link opens a third-party website that is not affiliated with STCU. to find your local regulator.) Also helpful: Give.orgThis link opens a third-party website that is not affiliated with STCU., a site by the Better Business Bureau’s Wise Giving Alliance that reports on 1,300 national charities.
Does the organization operate in the light of day?
Transparent organizations ― operating openly, communicating honestly, and demonstrating accountability ― are less likely to make decisions that make them look bad. And transparent organizations make it easy to study their finances.
Do the organization’s finances hold up?
If a charity isn’t handling its own money well, it won’t do a great job with yours. Charities do have day-to-day expenses, so if an organization claims 0% overhead, be skeptical. However, Charity Navigator says a charity that spends at least 75 percent of its budget on services is generally in good shape. It also should have some savings.
You’ll get a good overview of a charity’s finances by asking to see three years’ worth of its Form 990, an IRS form designed to provide a nonprofit’s financial information to the public. You also can find an organization’s 990s using websites such as ProPublicaThis link opens a third-party website that is not affiliated with STCU..